Feb 04, 2002 09:18 AM
5538 Views
(Updated Feb 04, 2002 09:20 AM)
A Mutual Fund is supposed to be managed by a professional person usually referred to as a Fund Manager who is supposed to think differently from the crowd.By doing this he would naturally tend to Create Wealth by investing in Quality Stocks rather than the Operator Driven Counters.However if you look at how fund managers have behaved over the past 3-4 years you will find almost all of them chasing the same few stories and thus the very purpose of their existence is defeated.
Classical example of this could be the Alliance AMC which during the 2000 boom period held almost 60% of their total equity assets in the favoured ICE sectors.
Another case is The ING Savings Trust which held almost 60% of assets in OPERATOR DRIVEN COUNTERS like HFCL ZEE DSQ besides a huge concentration in Wipro even when the stock was quoting in the 7000-8000 region
This theory may hold true for the equity sector especially.
The Debt market with its own limitations for the small investor does not give him much option especially considering the Huge Market Lot of a contract.
Thus My view is really that given the type of analysis that are thrown to us in the form of various news channels, newspapers research reports etc, the normal investor does not require ''real professionalism'' of the Fund Manager to ''Manage'' his funds.
I think if he is savvy enough, he could make a direct entry into the Equity Markets.In order to get into the Debt Market though, due to various legal constraints and his low size of investment, he must use the mutual funds to get into debt markets.
So Beware Investors, The Professional Fund Manager may not be so Professional after all!!!
